LMD Investor Forum 2022: Reflections from our Co-founder & CEO Alexander Tourre

The Last Mile Distribution (LMD) Investor Forum is an event organized by the Global Distributors Collective (GDC), an organization that brings together last-mile distributors, investors, and partners. This year’s forum focused on the capital continuum and its agenda included — understanding the challenges and opportunities that exist along that continuum, sharing innovative financing models for LMDs, and co-designing solutions to critical access to finance challenges.

Our co-founder and CEO, Alexander Tourre had the opportunity to highlight Easy Solar’s fundraising journey and growth over the years. We sat down with him after the event, to get his thoughts and takeaways from the forum.

What’s your take on the Global Distributors Collective and the work they are doing?

The Global Distributors Collective (GDC) is one of the organizations I admire for two reasons.

One, is that at Easy Solar, we see ourselves as more than just a solar company. We’ve always thought more than anything, that we are a last-mile distribution company. At the end of the day, if we distribute only one product, it would be difficult for us to sustain an extensive and far reaching agent and shop network. That’s why in recent years, we diversified our product portfolio to provide life improving products like smartphones and cookstoves on credit. The fact that the GDC is highlighting pay-as-you-go companies on a global scale as LMDs, makes their work aligned with what we believe in and are trying to achieve.

The second reason is their research on funding models and the different growth paths for LMDs. They’re helping us understand the whole scope of companies that exist in the space and showing that there isn’t just one pathway to scale.

Why did the GDC invite Easy Solar to speak?

We were identified as one of the fast-growing last-mile distributors. They asked me to share some anecdotes about how we grew. My message on that day touched on three key issues.

The first one hits on the fact that all funding stages are really important. Even for a company like us, that is considered successful, every round of funding we have received has been really difficult. I shared an example of how we never had more than one offer on the table in every single round, it’s always just one offer — It’s either we take it or the company dies, we cannot negotiate or do anything about it and that is hard. The idea was to let investors operating at every stage understand the difficulty and importance of financing an LMD at every stage that requires funding even if it’s a slow-growing or a fast-growing LMD.

The second thing I talked about is whether the challenge is that there isn’t enough capital or entrepreneurs? And specifically, how do you get people who have never started a company to start one? It’s not enough to take people from one to two, or two to three. But rather how do you take people who have just an idea but not the resources from zero to one.

The last issue I touched on was the potential solution to all types of distribution companies, which is product manufacturers offering on-lending facilities. When distributors can buy products from manufacturers and sell and then make the payment afterward — it helps a lot and that is something that is needed and much more important to the growth of LMDs. If I had more time, I would have touched on the area of currency risk, and the need for investors to offer more local currency lending. In a country like Sierra Leone, where the Leone is not performing well against the dollar, and we lend in USD but sell in Leones, it becomes difficult for distributors to finance their debt. The last mile ecosystem is often characterized by many such issues, so on-lending would be critical to the growth of lots of companies in our space.

What was your key takeaway from the forum?

What I took away from the forum is the understanding that the distinction between the fast-growing and the slow-growing distribution companies need not be permanent. It is not like some companies choose to be in the slow-growth space. There is always the possibility for fast growth in that spectrum and what investors have to do is look among the slow-growth companies, the ones with the potential and readiness to become a fast grower and give them the tools to move from one category to the next.